Claiming "project-killing delays," Standard Oil Co. of Ohio said yesterday it has abandoned plans for a 1,000- mile pipeline that would have carried Alaskan oil from the West Coast's glutted markets inland to Texas.
The announcement appears likely to increase pressures on the Carter administration to seek congressional approval for the exportation of surplus Alaskan oil.
California Gov. Edmund G. Brown and the state's regulatory bodies were widely blamed for the project's cancellation. Carter administration officials, members of Congress, Alaska's governor and Sohio chairman Alton W. Whitehouse all joined in the criticism.
Energy Secretary James R. Schlesinger had vigorously supported the $1 billion Pactex project because it offered an economic, near-term solution to the vexing 500,000-barrel-a-day West Coast oil surplus. When completed in the early 1980s, the Energy Department had said, it would also offer a new incentive for Alaskan North Slope oil producers to increase out-put. This now stands at 1.2 million barrels a day, but could be expanded quickly to 1.6 million and eventually to 2 million barrels a day.
Reaction to Sohio's decision was strong.
Henry M. Jackson (D-Wash.), chairman of the Senate Energy Committee, said, "To deny the use of a pipeline in the midst of a crisis is incredible to me."
Rep. John D. Dingell (D-Mich.) called it "a shame."
Sen. Ted Stevens (R-Alaska) said, "It is clear that Gov. Brown and the California government have sabotaged this project."
Brown denied last night that the state had subjected Sohio to regulatory delay. "California had reached the point where it was ready to go," he said in an interview, adding that Sohio had withdrawn from the project for a "lot of complicated reasons" that he said have nothing to do with California's procedures for issuing pipeline permits. Brown said the necessary permits would have been granted in the next few weeks.
White House and Energy Department officials declined on-the-record comment, but observed that Sohio's announcement will place unwanted political pressure on President Carter to consider asking Congress to approve Alaskan oil swaps, or exports.
Tom Quinn, one of Brown's top political strategists, also vigorously denied that the state's regulatory agency had forced Sohio to withdraw the project because of delays.
"Sohio knew that they would have the green light by the end of this month, and that the key permits would be issued by April," Quinn said in a phone interview.
Quinn, who is also head of the California Air Resources Board, went on to say, "There are a number of us here in California and at DOE who are very suspicious about Sohio's motives. They may have pulled out to force the president to allow this oil to go to Japan."
He also said that El Paso Natural Gas, which owns 675 miles of existing pipeline and was a participant in the Sohio project, had indicated a desire to use its lines for gas, not oil.
What is certain is that Sohio's decision is a political blow to the Brown administration, which frequently has boasted of improving the business climate in California. Some of Brown's aides have suggested that the governor would be more successful in enlisting business confidence that President Carter has been.
However, while Brown has advocated stringent fiscal policies that have pleased the business community in California, many larger firms have protested that numerous petty regulations and a hostile attitude from some key Brown appointees have created a business climate far more negative than is generally perceived.
Early in the Brown administration, Dow Chemical Co. withdrew plans for a major facility in the San Francisco Bay area after failing to win various environmental approvals.
Last year, the Brown-appointed California Energy Commission came under bitter attack from San Diego Gas and Electric Co. and others after the company's plans for the long-pending Sun Desert nuclear power plant were turned down.
As recently as two weeks ago Quinn was predicting that the Sohio plant would win the necessary agency clearances.
Sohio says that it had spent $50 million on its application process and was abandoning the pipeline because of regulatory delay.